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RandGold: Ivory Coast tax hike ‘not likely’

02 October 2012   (0 Comments)
Posted by: SAIT Technical
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By Bloomberg/Business Report

Randgold Resources does not expect Ivory Coast to proceed with a proposal to increase tax on producers of gold. "I have no doubt that sanity will prevail,” chief executive Mark Bristow said yesterday. "I would be surprised if it gained any traction. We have a very clear convention, which protects us from these sorts of things.” Ivory Coast said last week that it would increase taxes on gold mining companies as prices for the metal rose. Changes to the mining code would allow the government to earn 44.3 billion CFA francs (R728 million) in revenue from gold mining this year, a government spokesman said. London-listed Randgold operates the Tongon mine in Ivory Coast, where it produced 103 573 ounces of gold in the first half, or about 28 percent of its output. The tax would cost $67m (R552m) next year, reducing net income by 8 percent, Nomura Holdings said. Randgold pays a 3 percent royalty for output at Tongon. "We have lots of exploration commitments and if there is going to be a unilateral change to the tax code it would make it completely unworkable,” Bristow said, adding that for a country "to harvest value” from its natural resources industry, "you first have to have one”.


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